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CIRCULAR No. 79/2004/TT-BTC OF AUGUST 10, 2004 GUIDING THE PRIME MINISTER'S DECISION No. 78/2004/QD-TTg OF MAY 7, 2004 ADJUSTING AND SUPPLEMENTING A NUMBER OF MECHANISMS AND POLICIES TO ACCELERATE THE PROGRESS OF BUILDING OF POPULATION CLUSTERS AND LINES AND DWELLING HOUSES IN FREQUENTLY FLOODED MEKONG RIVER DELTA PROVINCES

Pursuant to the Prime Minister's Decision No. 173/2001/QD-TTg of November 6, 2001 on socio-economic development in the Mekong river delta in the 2001-2005 period;

Pursuant to the Prime Minister's Decision No. 105/2002/QD-TTg of August 2, 2002 on the policies for households in flooded areas to purchase on deferred payment stereobates and dwelling houses in population clusters and lines in Mekong river delta provinces;

Pursuant to the Prime Minister's Decision No. 78/2004/QD-TTg of May 7, 2004 adjusting and supplementing a number of mechanisms and policies to accelerate the progress of building of population clusters and lines and dwelling houses in frequently flooded Mekong river delta provinces.

The Finance Ministry hereby guides the adjustment and supplementation of a number of mechanisms and policies to accelerate the progress of building of population clusters and lines and dwelling houses in frequently flooded Mekong river delta provinces as follows:

I. REGARDING INVESTMENT CAPITAL FOR BUILDING ESSENTIAL INFRASTRUCTURES IN POPULATION CLUSTERS AND LINES

1. Sources of investment capital for building essential infrastructures in population clusters and lines:

In order to supply in time investment capital for building essential infrastructures in population clusters and lines (inner roads, water supply and drainage systems...) so as to create favorable conditions for and attract eligible households to quickly move and settle in population clusters and lines, localities should take initiative in allocating capital from the following sources:

1.1. Provincial People's Committees shall direct the provincial Finance Services to work with the Development Assistance Fund's local branches in identifying the total demands for loans for building local essential infrastructures. The central Development Assistance Fund shall provide loans for the provincial budgets in the State's annual investment credit plans for investment for the above-said purpose. The maximum lending term is 24 months. Lending interest rates shall comply with current regulations. Localities must commit themselves to repay debts and take self-responsibility for the use of loans to the Development Assistance Fund's provincial branches. The central Development Assistance Fund shall guide in detail the lending and debt recovery procedures.

1.2. Provincial People's Committees shall take initiative in integrating the target programs so as to make investments in essential infrastructures, especially the Program on rural clean water and environmental sanitation and rural roads in population clusters and lines under their respective management.

1.3. To mobilize capital sources for investment in building essential infrastructures in population clusters and lines by the mode that contractors shall advance capital for construction of works. Provincial People's Committees may appoint contractors according to law provisions among those that have full capital capability for such construction. After the works are completed and commissioned, payment shall be made to the contractors.

1.4. To mobilize capital contributions of the program's beneficiaries (such as contributions in cash, workdays...) for investment in building essential infrastructures in population clusters and lines.

1.5. Localities may take initiative in regulating the proceeds from the sale of 30% of stereobates in population clusters and lines for investment in essential infrastructures in population clusters and lines in their areas.

The determination of land prices of stereobates in population clusters and lines (30% for sale) shall comply with the provisions of Point 2.1, Section I, Part B of Joint Circular No. 72/2002/TTLT-TC-XD-NHNN of the Finance Ministry, the Construction Ministry and the State Bank of Vietnam, guiding the implementation of policies for households in flooded areas to purchase on deferred payment stereobates and dwelling houses in population clusters and lines in the Mekong river delta.

1.6. Where the above-said capital sources have been mobilized but capital is still insufficient, the provinces shall take initiative in arranging local budgets for building essential infrastructures. If localities which are receiving balancing grants from the central budget meet with difficulties, the Finance Ministry shall accelerate the progress of allocation of budget grants according to the annual plans at the proposals of the provincial People's Committees.

2. Capital sources for repayment of debts for building of essential infrastructures

The whole proceeds from the sale of 30% of stereobates (or the auction of land use rights) after essential infrastructures are built shall be, in principle, remitted into the local State treasuries (the provincial Finance Services shall open an account for monitoring and management of this capital source).

The proceeds from the sale of 30% of stereobates in population clusters and lines shall constitute the source of capital for repaying to the Development Assistance Fund amounts which the provinces have borrowed for building essential infrastructures.

- Where the amounts borrowed from the Development Assistance Fund are bigger than the proceeds from the sale of 30% of stereobates, the local budgets shall pay the difference to the Development Assistance Fund.

- Where the amounts borrowed from the Development Assistance Fund are smaller than the proceeds from the sale of 30% of stereobates, localities may take initiative in regulating the difference for further investment in building essential infrastructures in other population clusters and lines in the areas under their management.

3. Formulation of plans on investment capital for building essential infrastructures in population clusters and lines:

3.1. Investors shall base themselves on the specific conditions of the construction projects to make plans on total demands for, sources of, investment capital for building essential infrastructures in population clusters and lines, then send them to the provincial People's Committees and Finance Services. Such a plan includes the following details:

- The source of capital from the sale of 30% of stereobates.

- The source of capital borrowed from the Development Assistance Fund.

- The source of capital advanced by contractors for construction.

- The source of capital contributed by beneficiaries of the programs built with the contractors’ advance capital.

The above-said plans are formulated on an annual basis, divided by quarter. The management, payment and settlement of investment capital for building essential infrastructures shall comply with the State's current regulations and the provisions of this document.

3.2. Provincial Finance Services: On the basis of the investors' plans on investment in building essential infrastructures in population clusters and lines, the provincial Finance Services shall sum them up, propose the plans on arrangement of capital sources for building essential infrastructures in population clusters and lines in the whole provinces. Basing themselves on the plans proposed by the provincial Finance Services, the provincial People's Committees shall consider and decide to assign the plans to investors for management and implementation.

4. Reports on the building of essential infrastructures in population clusters and lines:

4.1. Investors shall make reports with the following contents:

- The situation of payment and settlement of investment capital for building essential infrastructures.

- On the fifth day of the first month of the subsequent quarter, investors shall make quarterly reports then send them to the provincial Finance Services.

Such a report shall clearly state difficulties, constraints and propose solutions to handling capital to ensure the construction progress.

4.2. The provincial Finance Services shall synthesize the reports and propose plans on adjustment of capital and capital sources of each investor, suitable to the schedule of building population clusters and lines, then submit them to the provincial People's Committees for consideration and decision.

4.3. The provincial People's Committees shall synthesize the capital plans and the situation of implementation of plans on investment in building essential infrastructures on a quarterly and annual basis, make reports thereon and send them to the Finance Ministry and the Coordinating Committee for the Program on building population clusters and lines and dwelling houses in the Mekong river delta region.

5. Responsibilities of concerned agencies:

5.1. The provincial People's Committees shall have the responsibilities:

- To direct the functional branches to synthesize and identify the demands for capital for building essential infrastructures and the capability of capital sources, including the demand for capital to be borrowed from the Development Assistance Fund.

- To direct the making of plans on, and take initiative in, transferring the proceeds from the sale of sterobates from the places with favorable conditions (where many stereobates are sold) to the places with unfavorable conditions (no or few sterobates are sold), for building essential infrastructures in population clusters and lines; to approve plans on sale of stereobates.

- To direct the borrowing and repayment of the State's credit capital for development investment; organize the hand-over of stereobates and loans to each household, recover such loans and repay them to the Development Assistance Fund.

- To direct the management of investment capital for building essential infrastructure projects and works according to the current regimes and guidance in this Circular.

5.2. The provincial Finance Services shall have the responsibilities:

- To synthesize and identify the demands for capital for building essential infrastructures and the capability of capital sources, including the demand for capital to be borrowed from the Development Assistance Fund.

- To make plans on transferring the proceeds from the sale of sterobates from the places with favorable conditions (where many stereobates are sold) to the places with unfavorable conditions (no or few sterobates are sold), then submit them to the provincial People's Committees for decision.

- To effect the borrowing and repayment of the State's credit capital for development investment according to the provincial People's Committees' decisions.

- To manage investment capital for building essential infrastructure projects and works according to the current regimes and guidance in this Circular.

5.3. The Development Assistance Fund shall be responsible for signing capital-lending contracts, transfer capital and collect debts under the signed contracts.

5.4. The State Treasury shall be responsible for controlling the payment of capital to projects and report on the capital payment according to regulations.

5.5. Investors shall have the responsibilities:

- To use and manage capital for the right purposes and with efficiency according to the State's current regulations.

- To fully make annual and quarterly plans on capital and capital sources in time, then send them to the concerned agencies according to the provisions of this Circular.

- To advise the provincial People's Committees on the sale of 30% of stereobates according to the State's current regulations and the provisions of this document.

- To make implementation plans and reports according to the provisions of this Circular.

- To pay and settle investment capital in a full and timely manner according to the State's current regulations.

II. REGARDING INVESTMENT CAPITAL FOR PROJECTS ON BUILDING EMBANKMENTS ENCLOSING THE EXISTING RESIDENTIAL QUARTERS

The projects on building embankments enclosing the existing residential quarters under the Program on building population clusters and lines and dwelling houses and in line with the irrigation plannings and flood control plannings of localities and the whole region shall be provided with the following capital sources:

1. Localities may use no more than 80% of the State budget capital allocated under the Prime Minister's Decision No. 216/2002/QD-TTg of March 25, 2002 (already notified by the Finance Ministry) for investing in the projects on building embankments enclosing the existing residential quarters.

The central budget capital already allocated under the Prime Minister's Decision No. 216/2002/QD-TTg of March 25, 2002 and capital borrowed from the Development Assistance Fund (already notified by the Finance Ministry) shall be the maximum capital amounts that localities may use for the raising of floors and building of embankments enclosing the existing residential quarters under the Program on building population clusters and lines.

2. In addition to the central budget capital amounts for investing in the projects on building embankments enclosing the existing residential quarters, localities may mobilize capital from the following sources:

2.1. Contributions from households benefiting from the areas covered by the embankment-building projects. For households residing in the embankment-enclosed areas and households residing elsewhere and moving in the embankment-enclosed areas, they may purchase on deferred payment stereobates and dwelling houses according to the mechanisms and policies prescribed in Article 1 of the Prime Minister's Decision No. 105/2002/QD-TTg of August 2, 2002.

The households' contribution levels shall be determined on the principle of distribution based on the land area of each household.

2.2. If the above-said capital sources have been mobilized but capital is still insufficient, localities may supplement other lawful capital from local budgets for implementation.

3. The management, payment and settlement of investment capital for projects on building embankments enclosing the existing residential quarters shall comply with the State's current regulations.

III. IMPLEMENTATION PROVISIONS

The management, payment and settlement of investment capital for building essential infrastructures in population clusters and lines and building embankments enclosing the existing residential quarters under the program on building population clusters and lines shall comply with the provisions in the current legal documents: the Finance Ministry's Circular No. 39/2002/TT-BTC of April 26, 2002 and Circular No. 54/2002/TT-BTC of June 25, 2002, and Joint Circular No. 72/2002/TTLT-TC-XD-NHNN of the Finance Ministry, the Construction Ministry and the State Bank of Vietnam, guiding the implementation of policies for households in flooded areas to purchase on deferred payment stereobates and dwelling houses in population clusters and lines in the Mekong river delta region.

This Circular takes effect 15 days after its publication in the Official Gazette.

Any problems arising in the course of implementation should be reported to the Finance Ministry for consideration and settlement.

For the Finance Minister

Vice Minister
NGUYEN CONG NGHIEP